United States v. Interstate Commerce Commission

• Decision Date: 04 January 1937
• Docket Number: No. 6690.,6690.
• Citation: 88 F.2d 780
• Parties: UNITED STATES ex rel. MAINE POTATO GROWERS & SHIPPERS ASS'N et al. v. INTERSTATE COMMERCE COMMISSION et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

88 F.2d 780 (1937)

UNITED STATES ex rel. MAINE POTATO GROWERS & SHIPPERS ASS'N et al. v. INTERSTATE COMMERCE COMMISSION et al.^*

No. 6690.

United States Court of Appeals for the District of Columbia.

Argued October 7, 1936.

Decided January 4, 1937.

Frederick E. Brown, Wilbur La Roe, Jr., and Arthur L. Winn, Jr., all of Washington, D. C., for appellants.

Joseph T. Sherier, J. Stanley Payne, and G. F. Snyder, all of Washington, D. C., for appellees.

Before ROBB, VAN ORSDEL, GRONER, and STEPHENS, JJ.

GRONER, J.

This is a mandamus proceeding. The appellants are an association of Maine potato growers and shippers and two of their distributors, one located at Norfolk and the other at Savannah. Respondent Bangor & Aroostook is a short line railroad extending from the northern part of Maine to Searsport on the Maine coast and to Northern Maine Junction in the interior, where it connects with the Maine Central Railroad. It is essentially a potato road just as the Virginian Railway is a coal road. Aroostook county, through which the railroad extends, produces practically 40 per cent. of the total potato tonnage shipped in the United States, and prior to the season 1931-32 all the potato traffic of the respondent Bangor Railroad moved from the potato fields on the northern end of its line to Maine Junction, where it was delivered to the Central road for further rail transportation. In October, 1931, a new development occurred in the forwarding of potato shipments from Aroostook county. There were then many ocean vessels idle, and the shippers were able to secure low rates on potato shipments by water from Searsport terminal to New York, Philadelphia, Baltimore, and points as far south as New Orleans, and Houston, Tex. A large percentage of the total shipments of potatoes was distributed under this new arrangement by rail and water carriage. But in June of 1932, effective August, 1932, the rail rates to Searsport were increased proportionately from 25 per cent. to 39 per cent. The rail carriage to Searsport exceeded that to Maine Junction by about 18 miles.

In August, 1932, appellant potato growers association filed with the Commission a complaint against the railroad, and in November Philips and Budreau, distributors, intervened. The complaints were docketed as Nos. 25511 and 25679, and were heard together. The growers' complaint alleged that the new rates were unjust and unreasonable in violation of section 1 of the Interstate Commerce Act (49 U.S.C.A. § 1). The complaint prayed for a cease and desist order and for the establishment of just and reasonable rates and for reparation. The complaint of Philips and Budreau alleged that the increase was discriminatory because it applied only to potatoes shipped to Searsport and not potatoes moving over other routes and because the new rates were unreasonably high when compared with other rates maintained by the railroads on other New England lines of similar transportation service.¹ The railroad denied that the rates were unreasonable and prayed for a dismissal of the complaints. A large amount of testimony was given and voluminous documentary evidence was introduced on behalf of the complainants, respondent, and interveners. Briefs were filed, and in July, 1933, Division 3 of the Commission handed down its report, in which the rates and practices complained of were found not to be unreasonable and unjust and the complaints were dismissed. In September, 1933, appellants petitioned for reconsideration before the full Commission. The Commission granted a rehearing, and oral argument was had, and in September, 1934, the Commission handed down its report (consisting of eight printed pages of the record) affirming the former report of Division 3, holding that the complained-of rates were not unreasonable. A subsequent petition for rehearing was denied in February, 1935, and in March, 1935, the present action was commenced in the District Court by the filing of a petition for a writ of mandamus against the Commission. The Commission answered the rule to show cause, and there was a reply to the answer and a rejoinder to the reply. The entire record before the examiner and the Commission was introduced, and witnesses were produced. At the conclusion of the hearings the District Court denied the writ and dismissed the petition. A subsequent motion to vacate the judgment and to reenter it upon findings of fact and conclusions of law was overruled.²

The record is full of evidence which is denied, qualified, or explained away by both sides. But in the view we take of the case the question for decision is not so much the weight or the adequacy of the evidence as it is the more vital question whether the Commission has discharged the mandatory and ministerial duty imposed upon it by statute.

Section 1 (5) of the act (U.S.Code, title 49, c. 1, §§ 1-6, 12, 13, 15 49 U.S. C.A. §§ 1-6, 12, 13, 15, Transp.Act 1920, 41 Stat. 474-488) requires all rates to be just and reasonable and makes unjust and unreasonable rates unlawful. Section 12 imposes on the Commission the positive duty of enforcing the act. Sections 13 and 15 provide for hearings upon petitions charging violations of the act, and empower the Commission, after hearings, to prescribe reasonable rates. Section 15a (2), as amended June 16, 1933, 48 Stat. 220, 49 U.S.C.A. § 15a (2), provides: "In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service."

Putting aside all questions of relative importance of the various elements of ratemaking — because the controlling facts in each case necessarily vary — there can be no doubt that in prescribing reasonable rates the Commission is required to take into consideration, among other factors, first, the effect of the rate on the movement of traffic; second, public need of adequate low-cost service; third, the carrier's need of sufficient revenue to enable it to give such service. This, as we think, is the clear mandate of the statute. But the weight to be given to these several factors is left to the discretion of the Commission, as is also the weight to be given the other and unnamed factors which of necessity vary in substance according to the facts.

If the problem were otherwise and if the duty of this court were to reweigh the evidence, much might be said in support of the proposition that there was ample evidence to sustain appellants' position that the new rates were unnecessary to enable the railway to operate at a profit — for it shows that under the old rates the railroad was unusually prosperous and even in the depression period paid regular dividends on its common stock, and under the terms of the recapture law (now repealed) was liable to surrender a large accumulated surplus.

There was also persuasive evidence that the right of the public to low-cost service was adversely affected by the increase, and equally persuasive evidence that the new rates had injuriously affected the movement of potatoes. And in this view — if we were sitting as a court of errors — it might well be that enough appears to justify reversal. But, as we shall presently point out, this is not the case, for the rule in mandamus is wholly different. The Commission, in disposing of the questions we have mentioned, held, first, that the new rates to Searsport, coupled with the low water...